Is Cryptocurrency Safe? Effective Wallet Safety Practices

NFTs will tell you that the learning curve is really confusing. Both crypto experts, and also traditional artists that have never heard about <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-blockchain/">blockchain technology</a></strong> before are going to have completely different outlooks on what an NFT is, and what it can be used for.</p>\n<p>Personally, I believe that everyone should have at least a fundamental understanding of NFTs since they are becoming increasingly more popular by the day. Understanding the concept will surely help you clearly see what NFTs are and why they are so valuable.</p>\n<p>In this section, we’re going to take a good look at NFTs - specifically, what they are, where they come from, why they are so expensive, and how you can purchase or even create them yourself. And don’t worry - we’ll avoid any and all technical jargon, and only introduce industry terms when they’re absolutely essential to the context of the section. </p>\n<p><em>So, let’s dive in!</em></p>\n<p>An “NFT” is a “<strong>non-fungible token</strong>”. “Non-fungible” is a fancy way of saying that something is completely unique, and cannot be replaced with something else.</p>\n<p>For example, think of your car (of course, if you have one) - sure, there are other cars out there that are probably just like yours, but they’ll have different mileage, different tires, engines, personal interior gadgets, various dings & dents, or even those stupid stickers on the trunk. All of these things make your car UNIQUE - there’s only ONE car purely like THAT!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-1.o.jpg/" alt=\"What are NFTs: "Non-Fungible Token" definition.\" width=\"1000\" height=\"550\" /></p>\n<p>So, before we continue, an example of a “<strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-fungible/">fungible” asset would be the <strong>value of a $1 bill</strong>. This is because the value of your $1 will always be equal to the value of another $1 bill, and you can trade your $1 for any other $1 bill out there - something you wouldn’t be able to do with your car.</p>\n<p>Following that, a token is simply a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-digital-asset/">digital asset</a></strong>. </p>\n<p>Rather, tokens are used as <strong>representations of different asset kinds</strong>. Obviously, you can’t physically take your car and just put it into the internet, as you put it into your garage. That's why you need some sort of digital representation tool! And this is where tokens come in. </p>\n<p>So, if you have a car, you could create a token to represent that car on the internet, as a physical object. Although there’s much more to it, in this context, you can think of it as a digitalized version of a physical item.</p>\n<p>Moving on and continuing with that car example, let’s imagine you have taken a picture of your car, and later created a digital token for it - this would be the NFT of your car! It’s “non-fungible” since it’s unique, and it’s a token since it’s not the actual car, but rather, <strong>a digital representation</strong> of it!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-2.o.jpg/" alt=\"What are NFTs: transforming a physical object into an NFT.\" width=\"1000\" height=\"550\" /></p>\n<p>Most people associate the term NFT with trading cards, digital artwork, or in-game items and characters. It’s important to understand that the NFTs themselves aren’t the actual assets, but rather, representations of those assets on the blockchain.</p>\n<p>Now, <strong>blockchains are essentially data storage locations</strong> - <em>virtual databases, if you will</em>. If you were to create a unique token - an NFT - on a blockchain, it would receive <strong>a special code,</strong> which would be used to identify it in the future. Since blockchains are (mostly) public, everyone would be able to see that the token was both created by you and that it’s the original - not a copy-pasted version made by your friend or a random guy on the internet.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-3.o.jpg/" alt=\"What are NFTs: Blockchain and NFTs.\" width=\"1000\" height=\"800\" /></p>\n<p><em>Heh, that’s a lot to wrap your head around, I’ll admit. </em>But don’t worry - it gets easier from here.</p>\n<p>Let me give you another example by referencing <strong>Twitter former CEO’s Jack Dorsey’s tweet. </strong>Dorsey created an NFT out of his first-ever tweet and auctioned it off for <strong>over $2,9 million.</strong></p>\n<p>Is the tweet available for everyone to see? Yes. However, the creator-signed NFT version of the tweet belongs solely to the individual who won the auction - this is very simple to prove with the help of the blockchain.</p>\n<p>When viewed on the blockchain, NFTs are simply <strong>strings of data. </strong>This textual data references an image, a GIF, or any other asset that can be viewed on the <strong><a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/best-cryptocurrency-exchange/">exchange platforms</a></strong> where the NFT is located on. Thus, when you purchase an NFT, you actually purchase that referential data.</p>\n<p>Now, this point is crucial to understand - if you own an NFT, it actually means that <strong>you own only that data.</strong> Not an image, nor a GIF, nor some sort of a virtual character - instead, you own the data that references the aforementioned assets. This data is encoded on the blockchain and references the place where the asset (picture, GIF, etc.) is located (the server).</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-4.o.jpg/" alt=\"What are NFTs: how NFTs work.\" width=\"1000\" height=\"550\" /></p>\n<p>Theoretically, the marketplace platform could swap out the image on their servers, and your data would point to a different picture of GIF than the one you’ve bought! Also, the image can simply be deleted from the server - your data on the blockchain, on the other hand, can not.</p>\n<p>Personally, this idea always bothered me the most, when it comes to NFTs. However, when you understand that you don’t own the actual image, but rather, the data on the blockchain, things start making much more sense.</p>\n<p>So, why do people buy NFTs, and why are some NFTs priced as high as they are? I mean, the earlier-mentioned Jack Dorsey’s tweet is a good reference here as well as some of the image collections from the popular NFT creators like <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-cryptopunks/">CryptoPunks or <strong><a href=https://www.bitdegree.org/"https://en.wikipedia.org/wiki/Bored_Ape/" target=\"_blank\" rel=\"nofollow noindex noopener\">Bored Ape</a></strong>.</p>\n<p>Well, there are actually a few things that lead to NFTs being as desirable as they are.</p>\n<p>For starters, they are <strong>a true innovation</strong> in the first place, and as most have heard, also an easy way to invest and get some profits. NFTs are the first phenomenon of this kind, and people still don’t really know what to make of them. Should they purely become a future art? Maybe the gaming industry could benefit most from them? Is there any utility for an NFT?</p>\n<p>These questions showcase that NFTs are still very new, and people are attracted to innovations that may potentially prove to be a good investment.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-5.o.jpg/" alt=\"What are NFTs: why do people buy expensive NFTs?\" width=\"1000\" height=\"650\" /></p>\n<p>This is actually the second big reason behind their popularity - the speculated value of what NFTs will be worth in the future. Some people compare NFTs to tech stocks back in the late 90s and the early 2000s. When the internet was still very young, people had no way of telling how much Amazon or Google stocks would be worth in a couple of decades.</p>\n<p>Nowadays, though, you have some NFTs being sold for huge amounts of money. For example, one of the most expensive NFTs ever sold is Beeple’s <strong>“EVERYDAY: THE FIRST 5000 DAYS”</strong> - it was sold for <strong>over $69,3 million.</strong> Following that, Beeple’s “One” was sold for $28,9 million. Some CryptoPunks have also been sold for anywhere from almost $8 million to over $10 million.</p>\n<p>The parallel here is that NFTs are still <strong>a very new concept,</strong> and a volatile market to be entering. It’s like a carnival - everything’s shiny and colorful, you never really know what sort of cool attraction lies around the corner, and every once in a while, you may find yourself on a rollercoaster ride - the last part is true for many NFT prices.</p>\n<p>This brings me to my next point - the reason why some NFTs are priced as high as they are. The answer here is actually very boring and simple - it’s a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-supply-and-demand/">supply & demand</a></strong> type of deal.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-6.o.jpg/" alt=\"What are NFTs: why are NFTs so expensive?\" width=\"1000\" height=\"580\" /></p>\n<p>Imagine that you have a very rare painting. You decide to auction it off on eBay, without setting a minimum bid. Sure, someone may come around and offer a couple of dollars for the painting.</p>\n<p>However, since it’s so rare, it’s highly likely to attract a lot of attention from art fans. This results in huge demand for something that’s very scarce - in other words, something that has <strong>a limited supply. </strong>This makes the price of the asset go up, exponentially.</p>\n<p>The same is true with many NFTs, as well. If the token is part of an exclusive collection, and there are only 10 NFTs that will ever be created within that collection, this makes it desirable for a lot of people - hence, the price goes up.</p>\n<p><strong>Social influence and renown</strong> are often huge factors, as well. Once again, think about the earlier-mentioned Jack Dorsey’s tweet NFT. Being one of the founders of Twitter, Jack Dorsey is a prominent figure in the business world - naturally, him selling an NFT of his very first tweet on the platform that he founded would draw a lot of attention and interest!</p>\n<p>Taking a step back, another reason why NFTs are as hyped up as they are is <strong>the utility factors. </strong>While most people assume that non-fungible tokens are merely used for collectible purposes, this isn’t necessarily true.</p>\n<p>Imagine if your favorite clothing store would issue a set of limited NFTs. In addition to being some cool images or GIFs that you can acquire, each NFT would provide the holder with lifetime access to set discounts when shopping within the store. This is a case for the utility aspect of an NFT - in other words, it creates tangible, real-world value for a non-fungible token.</p>\n<p>Combine this with the fact that there’s a limited number of NFTs available, and that all of them are auctioned off to the highest bidders, and this can result in some tokens possessing a huge price tag.</p>\n<p><em>So, let’s recap</em>. <strong>NFTs are valuable and sought-after</strong> because they are rare, might be created or owned by a famous or well-known individual, can provide tangible, real-world value, and are an innovation. The sum of these features leads to everyone, including their pets, having at least heard of NFTs, even if you know nothing else about the crypto space.</p>\n<p>Now, when you think about valuable NFTs today, the first names that would probably come to my mind are <strong>CryptoKitties, CryptoPunks, Decentraland, the Bored Ape Yacht Club, and Banksy.</strong> This is fair - many of these NFTs were the catalysts that drove the relatively niche industry into the mainstream.</p>\n<p>However, what was the very first NFT that was ever created? And when did this happen?</p>\n<p>Surprisingly, it’s not any one of the names mentioned earlier. Instead, the very first NFT - of the kind that we’re used to today, that is - was created all the way back in 2014, by a man named <strong>Kevin McCoy. </strong>The piece is called<strong> “Quantum”</strong> and is up for sale for <strong>over $7 million dollars.</strong></p>\n<p>So, while pop culture-relevant non-fungible tokens helped bring mainstream awareness to the market, and exploded the topic into unparalleled popularity, artists have been experimenting with the technology long before that.</p>\n<p>Finally, on the topic of experimenting with the technology, let’s now take a look at how YOU, - <em>yes, YOU</em> - <strong>can create an NFT of your own. </strong>Allow me to reassure you - while it may sound difficult from the sidelines, creating an NFT is actually very straightforward.</p>\n<p>First things first - you’re going to need a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-wallet/">cryptocurrency wallet</a>. </strong>This will act as the storage area for your NFTs, and will also house the <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-cryptocurrency/">cryptocurrency needed to pay for the creation process of the token. Think of it this way - if an NFT is a car, then the cryptocurrency used to make it is gas. Without gas, the car is practically useless. Following this example, a crypto wallet would be like a garage for your car.</p>\n<p>The most popular wallet in this regard is called <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-metamask/">MetaMask. It’s free to use, and you can download and install it as a browser extension. Once you set it up, you’ll be able to start using the wallet almost instantly.</p>\n<p>Next up, you need to fund the wallet. This can be done by visiting an exchange platform and purchasing some cryptocurrency for <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-fiat/">fiat money</a>.</strong> The currency that you’ll want to buy is known as <strong><a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ether (commonly referred to simply as Ethereum).</p>\n<p>Before we continue, though - why Ether? Well, the absolute <strong>majority of NFTs are created on the Ethereum blockchain.</strong> Thus, in order to pay for the creation process, you need to use the native currency of this particular blockchain - Ether.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-7.o.jpg/" alt=\"What are NFTs: how to create an NFT?\" width=\"1000\" height=\"650\" /></p>\n<p>Once you purchase Ether and transfer it from the exchange to your MetaMask wallet, you’re ready to go!</p>\n<p>Now, you will need to visit what’s known as <strong>an</strong> <strong>NFT marketplace</strong> where NFTs are auctioned. Just like eBay or Amazon for traditional goods, NFT marketplaces allow you to browse through different non-fungible tokens, and <strong>bid, purchase or sell the ones that you like.</strong> On that note, these marketplaces also allow you to create NFTs on them in a simple and efficient manner. For the sake of this example, I’ll reference the most popular NFT marketplaces out there - <strong>OpenSea and Rarible.</strong></p>\n<p>What you’ll need to do is <strong>connect your MetaMask wallet to OpenSea</strong> - this is like creating an account on the marketplace. Once you do so, you’ll be able to start the NFT creation process - OpenSea has a very detailed tutorial that guides you all through the process, and even if it’s your first time, you shouldn’t face any struggles whatsoever.</p>\n<p>Once you upload your picture or GIF and set all of the properties to your liking, all that you’ll need to do is create the NFT. Upon completion, your wallet address (the unique identification number of your personal cryptocurrency wallet) will <strong>forever be tied to the NFT,</strong> and no matter who owns it, you will always remain the verified creator of the asset in the blockchain log.</p>\n<p>Moving on, now that you’re equipped with the knowledge of how NFTs are created, buying a token will seem like a super-simple process.</p>\n<h2>How to Buy an NFT? </h2>\n<p>In order to buy an NFT, you will need to have the same MetaMask wallet connected to OpenSea, and that wallet will need to be funded with Ether, as well. It’s <strong>not possible to purchase NFTs with fiat money,</strong> and thus, it needs to be exchanged for crypto.</p>\n<p>With your wallet connected, you are now able to purchase your desired NFT (if it’s on sale) or bid on it at an auction. If you win, the token will be transferred to your wallet. That’s it - you’re a proud owner of a non-fungible token!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-8.o.jpg/" alt=\"What are NFTs: how to acquire an NFT?\" width=\"1000\" height=\"600\" /></p>\n<p>Make sure to keep your tokens secure, however - you could still store them in your MetaMask wallet, but if you want extra added security, you could also look into purchasing a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-hardware-wallet/">hardware wallet</a></strong> (a physical crypto wallet device), and connecting it to your MetaMask.</p>\n<p>Now as a recap, we took a good, non-technical look at the essentials of NFTs. We’ve covered what they are and what they aren’t, talked about their value proposition, and also covered the questions of how to create and purchase your desired non-fungible tokens.</p>\n<p>Anyways, if you want to learn more about the MetaMask wallet, make sure to check out the section <strong>\"<a href=https://www.bitdegree.org/"/crypto/learn/what-is-metamask/">What is the MetaMask?</a>\".</strong></p>","meta_title":"What are NFTs? A Guide to Creating or Purchasing One","meta_description":"Can't find a clear and simple explanation about what are NFTs? Find an answer right here alongside a guide to creating or purchasing an NFT.","meta_keywords":"what is an nft, what are nfts, what is a nft, what is a nft, what is nft mean, what is nft stand for, are nfts worth it, what are nfts in crypto","order":1,"language":"en","created_at":"2022-05-02T06:07:35.000000Z","updated_at":"2023-05-16T11:44:33.000000Z","modified_content":"<p>Many people who have gotten into <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-non-fungible-token-nft/">NFTs will tell you that the learning curve is really confusing. Both crypto experts, and also traditional artists that have never heard about <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-blockchain/">blockchain technology</a></strong> before are going to have completely different outlooks on what an NFT is, and what it can be used for.</p>\n<p>Personally, I believe that everyone should have at least a fundamental understanding of NFTs since they are becoming increasingly more popular by the day. Understanding the concept will surely help you clearly see what NFTs are and why they are so valuable.</p>\n<p>In this section, we’re going to take a good look at NFTs - specifically, what they are, where they come from, why they are so expensive, and how you can purchase or even create them yourself. And don’t worry - we’ll avoid any and all technical jargon, and only introduce industry terms when they’re absolutely essential to the context of the section. </p>\n<p><em>So, let’s dive in!</em></p>\n<p>An “NFT” is a “<strong>non-fungible token</strong>”. “Non-fungible” is a fancy way of saying that something is completely unique, and cannot be replaced with something else.</p>\n<p>For example, think of your car (of course, if you have one) - sure, there are other cars out there that are probably just like yours, but they’ll have different mileage, different tires, engines, personal interior gadgets, various dings & dents, or even those stupid stickers on the trunk. All of these things make your car UNIQUE - there’s only ONE car purely like THAT!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-1.o.jpg/" alt=\"What are NFTs: "Non-Fungible Token" definition.\" width=\"1000\" height=\"550\" /></p>\n<p>So, before we continue, an example of a “<strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-fungible/">fungible” asset would be the <strong>value of a $1 bill</strong>. This is because the value of your $1 will always be equal to the value of another $1 bill, and you can trade your $1 for any other $1 bill out there - something you wouldn’t be able to do with your car.</p>\n<p>Following that, a token is simply a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-digital-asset/">digital asset</a></strong>. </p>\n<p>Rather, tokens are used as <strong>representations of different asset kinds</strong>. Obviously, you can’t physically take your car and just put it into the internet, as you put it into your garage. That's why you need some sort of digital representation tool! And this is where tokens come in. </p>\n<p>So, if you have a car, you could create a token to represent that car on the internet, as a physical object. Although there’s much more to it, in this context, you can think of it as a digitalized version of a physical item.</p>\n<p>Moving on and continuing with that car example, let’s imagine you have taken a picture of your car, and later created a digital token for it - this would be the NFT of your car! It’s “non-fungible” since it’s unique, and it’s a token since it’s not the actual car, but rather, <strong>a digital representation</strong> of it!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-2.o.jpg/" alt=\"What are NFTs: transforming a physical object into an NFT.\" width=\"1000\" height=\"550\" /></p>\n<p>Most people associate the term NFT with trading cards, digital artwork, or in-game items and characters. It’s important to understand that the NFTs themselves aren’t the actual assets, but rather, representations of those assets on the blockchain.</p>\n<p>Now, <strong>blockchains are essentially data storage locations</strong> - <em>virtual databases, if you will</em>. If you were to create a unique token - an NFT - on a blockchain, it would receive <strong>a special code,</strong> which would be used to identify it in the future. Since blockchains are (mostly) public, everyone would be able to see that the token was both created by you and that it’s the original - not a copy-pasted version made by your friend or a random guy on the internet.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-3.o.jpg/" alt=\"What are NFTs: Blockchain and NFTs.\" width=\"1000\" height=\"800\" /></p>\n<p><em>Heh, that’s a lot to wrap your head around, I’ll admit. </em>But don’t worry - it gets easier from here.</p>\n<p>Let me give you another example by referencing <strong>Twitter former CEO’s Jack Dorsey’s tweet. </strong>Dorsey created an NFT out of his first-ever tweet and auctioned it off for <strong>over $2,9 million.</strong></p>\n<p>Is the tweet available for everyone to see? Yes. However, the creator-signed NFT version of the tweet belongs solely to the individual who won the auction - this is very simple to prove with the help of the blockchain.</p>\n<p>When viewed on the blockchain, NFTs are simply <strong>strings of data. </strong>This textual data references an image, a GIF, or any other asset that can be viewed on the <strong><a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/best-cryptocurrency-exchange/">exchange platforms</a></strong> where the NFT is located on. Thus, when you purchase an NFT, you actually purchase that referential data.</p>\n<p>Now, this point is crucial to understand - if you own an NFT, it actually means that <strong>you own only that data.</strong> Not an image, nor a GIF, nor some sort of a virtual character - instead, you own the data that references the aforementioned assets. This data is encoded on the blockchain and references the place where the asset (picture, GIF, etc.) is located (the server).</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-4.o.jpg/" alt=\"What are NFTs: how NFTs work.\" width=\"1000\" height=\"550\" /></p>\n<p>Theoretically, the marketplace platform could swap out the image on their servers, and your data would point to a different picture of GIF than the one you’ve bought! Also, the image can simply be deleted from the server - your data on the blockchain, on the other hand, can not.</p>\n<p>Personally, this idea always bothered me the most, when it comes to NFTs. However, when you understand that you don’t own the actual image, but rather, the data on the blockchain, things start making much more sense.</p>\n<p>So, why do people buy NFTs, and why are some NFTs priced as high as they are? I mean, the earlier-mentioned Jack Dorsey’s tweet is a good reference here as well as some of the image collections from the popular NFT creators like <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-cryptopunks/">CryptoPunks or <strong><a href=https://www.bitdegree.org/"https://en.wikipedia.org/wiki/Bored_Ape/" target=\"_blank\" rel=\"nofollow noindex noopener\">Bored Ape</a></strong>.</p>\n<p>Well, there are actually a few things that lead to NFTs being as desirable as they are.</p>\n<p>For starters, they are <strong>a true innovation</strong> in the first place, and as most have heard, also an easy way to invest and get some profits. NFTs are the first phenomenon of this kind, and people still don’t really know what to make of them. Should they purely become a future art? Maybe the gaming industry could benefit most from them? Is there any utility for an NFT?</p>\n<p>These questions showcase that NFTs are still very new, and people are attracted to innovations that may potentially prove to be a good investment.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-5.o.jpg/" alt=\"What are NFTs: why do people buy expensive NFTs?\" width=\"1000\" height=\"650\" /></p>\n<p>This is actually the second big reason behind their popularity - the speculated value of what NFTs will be worth in the future. Some people compare NFTs to tech stocks back in the late 90s and the early 2000s. When the internet was still very young, people had no way of telling how much Amazon or Google stocks would be worth in a couple of decades.</p>\n<p>Nowadays, though, you have some NFTs being sold for huge amounts of money. For example, one of the most expensive NFTs ever sold is Beeple’s <strong>“EVERYDAY: THE FIRST 5000 DAYS”</strong> - it was sold for <strong>over $69,3 million.</strong> Following that, Beeple’s “One” was sold for $28,9 million. Some CryptoPunks have also been sold for anywhere from almost $8 million to over $10 million.</p>\n<p>The parallel here is that NFTs are still <strong>a very new concept,</strong> and a volatile market to be entering. It’s like a carnival - everything’s shiny and colorful, you never really know what sort of cool attraction lies around the corner, and every once in a while, you may find yourself on a rollercoaster ride - the last part is true for many NFT prices.</p>\n<p>This brings me to my next point - the reason why some NFTs are priced as high as they are. The answer here is actually very boring and simple - it’s a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-supply-and-demand/">supply & demand</a></strong> type of deal.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-6.o.jpg/" alt=\"What are NFTs: why are NFTs so expensive?\" width=\"1000\" height=\"580\" /></p>\n<p>Imagine that you have a very rare painting. You decide to auction it off on eBay, without setting a minimum bid. Sure, someone may come around and offer a couple of dollars for the painting.</p>\n<p>However, since it’s so rare, it’s highly likely to attract a lot of attention from art fans. This results in huge demand for something that’s very scarce - in other words, something that has <strong>a limited supply. </strong>This makes the price of the asset go up, exponentially.</p>\n<p>The same is true with many NFTs, as well. If the token is part of an exclusive collection, and there are only 10 NFTs that will ever be created within that collection, this makes it desirable for a lot of people - hence, the price goes up.</p>\n<p><strong>Social influence and renown</strong> are often huge factors, as well. Once again, think about the earlier-mentioned Jack Dorsey’s tweet NFT. Being one of the founders of Twitter, Jack Dorsey is a prominent figure in the business world - naturally, him selling an NFT of his very first tweet on the platform that he founded would draw a lot of attention and interest!</p>\n<p>Taking a step back, another reason why NFTs are as hyped up as they are is <strong>the utility factors. </strong>While most people assume that non-fungible tokens are merely used for collectible purposes, this isn’t necessarily true.</p>\n<p>Imagine if your favorite clothing store would issue a set of limited NFTs. In addition to being some cool images or GIFs that you can acquire, each NFT would provide the holder with lifetime access to set discounts when shopping within the store. This is a case for the utility aspect of an NFT - in other words, it creates tangible, real-world value for a non-fungible token.</p>\n<p>Combine this with the fact that there’s a limited number of NFTs available, and that all of them are auctioned off to the highest bidders, and this can result in some tokens possessing a huge price tag.</p>\n<p><em>So, let’s recap</em>. <strong>NFTs are valuable and sought-after</strong> because they are rare, might be created or owned by a famous or well-known individual, can provide tangible, real-world value, and are an innovation. The sum of these features leads to everyone, including their pets, having at least heard of NFTs, even if you know nothing else about the crypto space.</p>\n<p>Now, when you think about valuable NFTs today, the first names that would probably come to my mind are <strong>CryptoKitties, CryptoPunks, Decentraland, the Bored Ape Yacht Club, and Banksy.</strong> This is fair - many of these NFTs were the catalysts that drove the relatively niche industry into the mainstream.</p>\n<p>However, what was the very first NFT that was ever created? And when did this happen?</p>\n<p>Surprisingly, it’s not any one of the names mentioned earlier. Instead, the very first NFT - of the kind that we’re used to today, that is - was created all the way back in 2014, by a man named <strong>Kevin McCoy. </strong>The piece is called<strong> “Quantum”</strong> and is up for sale for <strong>over $7 million dollars.</strong></p>\n<p>So, while pop culture-relevant non-fungible tokens helped bring mainstream awareness to the market, and exploded the topic into unparalleled popularity, artists have been experimenting with the technology long before that.</p>\n<p>Finally, on the topic of experimenting with the technology, let’s now take a look at how YOU, - <em>yes, YOU</em> - <strong>can create an NFT of your own. </strong>Allow me to reassure you - while it may sound difficult from the sidelines, creating an NFT is actually very straightforward.</p>\n<p>First things first - you’re going to need a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-wallet/">cryptocurrency wallet</a>. </strong>This will act as the storage area for your NFTs, and will also house the <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-cryptocurrency/">cryptocurrency needed to pay for the creation process of the token. Think of it this way - if an NFT is a car, then the cryptocurrency used to make it is gas. Without gas, the car is practically useless. Following this example, a crypto wallet would be like a garage for your car.</p>\n<p>The most popular wallet in this regard is called <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-metamask/">MetaMask. It’s free to use, and you can download and install it as a browser extension. Once you set it up, you’ll be able to start using the wallet almost instantly.</p>\n<p>Next up, you need to fund the wallet. This can be done by visiting an exchange platform and purchasing some cryptocurrency for <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-fiat/">fiat money</a>.</strong> The currency that you’ll want to buy is known as <strong><a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ether (commonly referred to simply as Ethereum).</p>\n<p>Before we continue, though - why Ether? Well, the absolute <strong>majority of NFTs are created on the Ethereum blockchain.</strong> Thus, in order to pay for the creation process, you need to use the native currency of this particular blockchain - Ether.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-7.o.jpg/" alt=\"What are NFTs: how to create an NFT?\" width=\"1000\" height=\"650\" /></p>\n<p>Once you purchase Ether and transfer it from the exchange to your MetaMask wallet, you’re ready to go!</p>\n<p>Now, you will need to visit what’s known as <strong>an</strong> <strong>NFT marketplace</strong> where NFTs are auctioned. Just like eBay or Amazon for traditional goods, NFT marketplaces allow you to browse through different non-fungible tokens, and <strong>bid, purchase or sell the ones that you like.</strong> On that note, these marketplaces also allow you to create NFTs on them in a simple and efficient manner. For the sake of this example, I’ll reference the most popular NFT marketplaces out there - <strong>OpenSea and Rarible.</strong></p>\n<p>What you’ll need to do is <strong>connect your MetaMask wallet to OpenSea</strong> - this is like creating an account on the marketplace. Once you do so, you’ll be able to start the NFT creation process - OpenSea has a very detailed tutorial that guides you all through the process, and even if it’s your first time, you shouldn’t face any struggles whatsoever.</p>\n<p>Once you upload your picture or GIF and set all of the properties to your liking, all that you’ll need to do is create the NFT. Upon completion, your wallet address (the unique identification number of your personal cryptocurrency wallet) will <strong>forever be tied to the NFT,</strong> and no matter who owns it, you will always remain the verified creator of the asset in the blockchain log.</p>\n<p>Moving on, now that you’re equipped with the knowledge of how NFTs are created, buying a token will seem like a super-simple process.</p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"What is an NFT? (Explained with Animations)\"\n title=\"What is an NFT? (Explained with Animations)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: What are Non-Fungible Tokens (NFTs)?</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"What are Non-Fungible Tokens (NFTs)?\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"YL0-sEzDDNI\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">What is an NFT? (Explained with Animations)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/YL0-sEzDDNI/hq720.jpg/"/n alt=\"What is an NFT? (Explained with Animations)\"\n title=\"What is an NFT? (Explained with Animations)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"What is an NFT? (Explained with Animations)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"YL0-sEzDDNI\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>How to Buy an NFT? </h2>\n<p>In order to buy an NFT, you will need to have the same MetaMask wallet connected to OpenSea, and that wallet will need to be funded with Ether, as well. It’s <strong>not possible to purchase NFTs with fiat money,</strong> and thus, it needs to be exchanged for crypto.</p>\n<p>With your wallet connected, you are now able to purchase your desired NFT (if it’s on sale) or bid on it at an auction. If you win, the token will be transferred to your wallet. That’s it - you’re a proud owner of a non-fungible token!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-are-nfts-8.o.jpg/" alt=\"What are NFTs: how to acquire an NFT?\" width=\"1000\" height=\"600\" /></p>\n<p>Make sure to keep your tokens secure, however - you could still store them in your MetaMask wallet, but if you want extra added security, you could also look into purchasing a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-hardware-wallet/">hardware wallet</a></strong> (a physical crypto wallet device), and connecting it to your MetaMask.</p>\n<p>Now as a recap, we took a good, non-technical look at the essentials of NFTs. We’ve covered what they are and what they aren’t, talked about their value proposition, and also covered the questions of how to create and purchase your desired non-fungible tokens.</p>\n<p>Anyways, if you want to learn more about the MetaMask wallet, make sure to check out the section <strong>\"<a href=https://www.bitdegree.org/"/crypto/learn/what-is-metamask/">What is the MetaMask?</a>\".</strong></p>","preview_url":"https://www.bitdegree.org/crypto/learn/what-are-nfts","youtube_video":{"id":11,"channel_id":1,"sort":61,"video_title":"What is an NFT? (Explained with Animations)","description":"What is an NFT?\n\nAn NFT is a non-fungible token - a representation of digital or physical assets on the blockchain. Popular for many reasons, from a sense of exclusivity to investment, NFTs are often thought to be the future of financial technology and art! \n\nNFTs have really taken the world by storm over the past few years, but to some they are still as mysterious as ever. In this video, I’ll explain to you what an NFT is and what you need to know about it in a simple way. Without using any crypto jargon, I’ll give you simple examples and analogies to make you understand how NFTs are made, how they work, and what they have become in our modern world!\n\nHave you ever created, bought, or sold NFTs before? Share your experience in the comments below!\n\nVideo Time Table:\n\n0:00 What is an NFT?\n1:12 What Are NFTs?\n2:49 Blockchain And NFTs\n3:37 Example of an NFT - a Tweet\n4:00 What Do You Actually Buy?\n5:13 Why Do People Buy NFTs?\n7:07 Why Are NFTs So Expensive?\n9:07 How Are NFTs Made?\n10:00 How Can YOU Make an NFT?\n12:33 How To buy an NFT?\n13:19 Wrap-up: What is an NFT?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps://twitter.com/crypto_xplained\n\n#WhatIsAnNFT #WhatAreNFTs #GuideToNFTs #NFT #NFTs #NFTs2022 #Crypto #Tokens #Blockchain","video_id":"YL0-sEzDDNI","duration":826,"view_count":16851,"thumbnail_url":"https://i.ytimg.com/vi/YL0-sEzDDNI/hq720.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-01-20 15:06:18","created_at":"2022-02-21T13:20:28.000000Z","updated_at":"2023-05-21T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}},"prevSection":{"id":7,"featured_image_id":6436,"original_id":null,"youtube_video_id":4,"author_id":40,"translator_id":null,"chapter_id":4,"title":"Metamask: The Leading Non-Custodial Wallet","slug":"what-is-metamask","definition":"Did you know that, according to Bloomberg, MetaMask's browser extension had over 21 million active users, as of November 2021?","status":"published","content":"<p>In this section, I’m going to explain what MetaMask is!</p>\n<p><strong>MetaMask is arguably one of the best quality-of-life innovations in online shopping is automated checkouts. </strong>You simply enter your PayPal or debit card information once, and the next time you purchase something from the website, all you need to do is click one button, and all of the money transaction processes happen for you.</p>\n<p>Essentially, this is how MetaMask functions in the cryptocurrency world, as well.</p>\n<p>In this section, we’re going to check out what is MetaMask. We’ll also answer questions such as “<strong>is MetaMask safe?</strong>”, and how you can use this crypto software platform in your daily life.</p>\n<p>Let’s get right to it, shall we?</p>\n<h2>What is MetaMask?</h2>\n<p>First things first - what is MetaMask?</p>\n<p>Well, MetaMask is an internet app that serves a few different purposes. The primary (and most well-known) purpose is <strong>cryptocurrency storage</strong> - in other words, MetaMask is a “<a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/best-cryptocurrency-wallet/">crypto wallet</strong></a>”, or actually a <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-hot-wallet/">HOT crypto wallet</strong></a>!</p>\n<p>Why “hot”, though?</p>\n<p>Simply, in crypto, all <strong>software-based wallets </strong>are called “hot wallets”, and as an opposite, all electronic hardware-based wallets are called “<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-cold-wallet/">cold wallets</strong></a>”.</p>\n<p>So, first and foremost, the MetaMask app is a software wallet!</p>\n<p><img title=\"What is MetaMask: Cold and Hot crypto wallets.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-1.o.jpg/" alt=\"What is MetaMask: Cold and Hot crypto wallets.\" width=\"800\" height=\"532\" /></p>\n<p>Let’s break the concept of a crypto wallet down.</p>\n<p>A cryptocurrency wallet is a digital equivalent of your physical wallet. Just as you hold your real money in your physical wallet, cryptocurrency wallets hold your digital coins - cryptocurrencies such as <a href=https://www.bitdegree.org/"/crypto/buy-bitcoin-btc/">Bitcoin, <a href=https://www.bitdegree.org/"/crypto/buy-ethereum-eth/">Ethereum, and many more.</p>\n<p>Some wallets can only hold one coin, and are thus “dedicated”. For example, a Bitcoin-dedicated wallet would only be able to hold BTC coins. <strong>Others have the ability to hold multiple crypto coins - it depends!</strong></p>\n<p>MetaMask, however, is <strong>a dedicated wallet</strong> - it only allows you to hold everything that is related to the Ethereum blockchain: <strong>Ethereum coins, and any other ETH-based tokens</strong>. Check out the section called \"<a href=https://www.bitdegree.org/"/crypto/learn/coin-vs-token/">Coins VS Tokens</strong></a>\" to understand the differences and how they are related.</p>\n<p>But shortly, cryptocurrency tokens are projects built on the blockchain of a specific coin - in this case, Ethereum. It’s a bit more complex and technical than that, but that's the premise. But what you should clearly understand is that you can’t store your Bitcoins on Metamask, but <strong>you can store any token that is built on the Ethereum blockchain</strong>, for example, <strong>Tether, Shiba Inu, Axie Infinity, and similar</strong>.</p>\n<p style=\"text-align: center;\"><img title=\"What is MetaMask: What is MetaMask?\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-2.o.jpg/" alt=\"What is MetaMask: What is MetaMask?\" width=\"801\" height=\"606\" /></p>\n<p>Here is an example: imagine that you’ve decided to go and wash your car. You approach a car washing station and have to insert coins in order for the machines to start working. However, the car wash only accepts US dollar coins, and any other foreign currencies, like Euros or Pounds Sterling get rejected!</p>\n<p>The same logic applies to MetaMask - it only accepts Ethereum, and tokens that are built on the Ethereum blockchain.</p>\n<p>What about the “hot” wallet part, though - how is it HOT, in the first place?</p>\n<p>In the cryptocurrency world, “hot” wallets are those that <strong>maintain a constant connection to the internet</strong>. This means that, in order to use MetaMask, you will need to always be connected to the internet, and have access to the browser (or device) that the wallet is installed on. Yes, <strong>MetaMask acts both as a browser extension, and a mobile app.</strong></p>\n<p>Specifically, in the same manner, as how you would add apps such as Grammarly or adBlock to your browser, as a web extension, MetaMask will need to be added, as well. Or it can be downloaded from either the Android or the iOS stores.</p>\n<p>So - it’s clear that MetaMask is primarily used as an Ethereum wallet. However, as you might have heard, it’s actually considered to be the most popular ETH wallet out there, in general! MetaMask has managed to achieve this by offering its users ease of use.</p>\n<p style=\"text-align: center;\"><img title=\"What is MetaMask: What is a \" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-3.o.jpg/" alt=\"What is MetaMask: What is a \" width=\"1031\" height=\"773\" /></p>\n<p>To be more specific, MetaMask allows you to perform cryptocurrency transactions (Ethereum payments or transfers) in a super-simple manner.<strong> You can even buy crypto tokens from an integrated third party, without leaving your MetaMask wallet, with the company taking a small cut as a transaction fee </strong>(this is how MetaMask makes money, too)!</p>\n<p>Think of the earlier-discussed PayPal example - now, imagine PayPal integrated into your browser!</p>\n<p>No matter where you go online, if you’d like to purchase something, all that you’d need to do is enter your password, and that’s it - you'll be able to pay for your order in a matter of seconds! MetaMask works in a similar manner - integrated into your browser, it allows you <strong>to access your Ethereum or ETH tokens in just a few clicks</strong>. You can also pay, send, or exchange ETH with anyone you’d like.</p>\n<h2>Is MetaMask Safe?</h2>\n<p>So - MetaMask is very convenient to use, as a cryptocurrency wallet. We’ve established that much already! However, naturally, you might question - <strong>is it reliable and safe to use, in the first place?</strong></p>\n<p>The short answer is <strong>YES,</strong> it is. Let’s expand on it, though, shall we?</p>\n<p>MetaMask provides <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-encryption/">encryption and security technology and <strong>acts as the middleman between the user, and the service that they are accessing</strong>. In other words, MetaMask can be seen as the bridge between two parties - a bridge that’s full of security patrols, cameras, and guard posts.</p>\n<p>Before we continue, I urge you to, once again, think about the <strong>PayPal</strong> example we’ve used a couple of times in this section already. PayPal encrypts your data, and protects all of your financial information - <strong>your money is only sent to those shops and service providers that you approve, manually</strong>.</p>\n<p>In essence, MetaMask is the same. As a wallet, it protects your funds but still allows you to access them in a quick and effortless manner, when you need to.</p>\n<p>All of that being said, I do have to point out that, all things considered, it IS a hot wallet - one that maintains a constant connection to the internet. <strong>In turn, this does open up doors for vulnerabilities.</strong></p>\n<p>Being connected to the web all the time, hot wallets are more prone to break-ins and hacking attempts, as opposed to cold wallets, or <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-hardware-wallet/">hardware devices. These are special devices that usually look like a USB drive, but are designated for storing and keeping your cryptocurrencies safe, offline.</p>\n<p>Hot wallets, in general, aren’t the safest choice, when it comes to storing cryptocurrencies. However, they are very convenient, and<strong> require less time and effort to use, when compared to hardware devices</strong>!</p>\n<p style=\"text-align: center;\"><img title=\"What is MetaMask: types of wallets.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-5.o.jpg/" alt=\"What is MetaMask: types of wallets.\" width=\"800\" height=\"401\" /></p>\n<p>An example that you can imagine is that of a car. Cars can be dangerous - something can go wrong with the engine, or you might get a flat tire mid-journey, and swirl into a ditch. On top of that, you always need to keep an eye on other drivers on the road, lest they would decide to drive into you.</p>\n<p>That said, many people choose to drive cars, nonetheless. This is because the risk level is rather mediocre, especially if you take all of the active precautions beforehand - don’t go over the speed limit, wear your seatbelt, and so on.</p>\n<p>The same can be said about hot wallets such as MetaMask, too. <strong>If you don’t visit shady websites or press suspicious links, and avoid any potential scams or strange individuals offering to double your crypto if you send it to them, you will minimize the risks, too!</strong></p>\n<h2>How to Use MetaMask?</h2>\n<p>Up to this point, we’ve covered what is MetaMask, and the question of whether or not it’s safe to use. Now, let’s take a look at how you can actually start using the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/tutorials/cryptocurrency-wallet/">cryptocurrency wallet</strong></a> in question!</p>\n<p>Since simplicity is key with MetaMask, installing the wallet isn’t a difficult process, either. Just <strong>3 steps</strong> and you’re done!</p>\n<p>All that you need to do is go to <strong>MetaMask.io</strong>, the official website. By the way, don’t fall for other scammy websites impersonating the real MetaMask wallet, and always check the URL in your browser for any possible spelling errors while visiting their website! It is kind of a usual fraudster’s practice, to fake an official domain, so be aware!</p>\n<p>So next, depending on the device that you might be using, you will be able to download the official Metamask wallet <strong>as a browser extension</strong>, or as an app for Android or iOS mobile devices.</p>\n<p style=\"text-align: center;\"><img title=\"What is MetaMask: How to use MetaMask?\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-6.o.jpg/" alt=\"What is MetaMask: How to use MetaMask?\" width=\"800\" height=\"650\" /></p>\n<p>Once it’s installed, you’ll need to set up the wallet itself. While setting up, the most important part is <strong>the recovery phrase</strong>! Save it securely when prompted. I just want to emphasize here that the recovery phrase is the only tool that you’ll have in order to get your crypto funds back if you lose access to your wallet (for example, your computer gets damaged, or you lose your phone). Never ever share it with anybody for any reason!</p>\n<p><strong>Once all of that is done, that’s it - you can start sending and receiving Ethereum and its tokens from and to your MetaMask account!</strong></p>\n<p>One handy feature is that MetaMask also allows you to create multiple wallet accounts within the same app, if you so wish to, and even connect your hardware wallet to one of those accounts, for extra added security. This is like taking a safe full of money, and concreting it underground - <strong>it will increase the safety and security of your assets exponentially!</strong></p>\n<p style=\"text-align: center;\"><strong><img title=\"What is MetaMask: Recap.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-7.o.jpg/" alt=\"What is MetaMask: Recap.\" width=\"800\" height=\"458\" /></strong></p>\n<p>So, in this section, we’ve covered what MetaMask is, whether or not it’s a safe wallet to use, and how you can start using it, yourself. Being one of the most popular Ethereum wallets out there, it’s definitely worth learning about the platform, even if you don’t plan on using it, personally. And finally, I really encourage you <strong>just to go and try it yourself</strong>, it costs nothing and will take you a minute. But overall you’ll learn through experiencing it yourself!</p>\n<p>That being said, I hope this section was helpful to you and you can also check out another topic such as \"<a href=https://www.bitdegree.org/"/crypto/learn/what-are-smart-contracts/">What are Smart Contracts</strong></a>?\".</p>","meta_title":"What is MetaMask: Is it Reliable and Safe to Use?","meta_description":"In this section, you'll find out what is MetaMask & what is a MetaMask wallet. There is also a step-by-step guide on how to use MetaMask!","meta_keywords":"What is Metamask, What is Metamask Wallet, Meta Mask, How to use Metamask,","order":4,"language":"en","created_at":"2022-05-02T12:03:53.000000Z","updated_at":"2023-01-19T12:24:18.000000Z","modified_content":"<p>In this section, I’m going to explain what MetaMask is!</p>\n<p><strong>MetaMask is arguably one of the best quality-of-life innovations in online shopping is automated checkouts. </strong>You simply enter your PayPal or debit card information once, and the next time you purchase something from the website, all you need to do is click one button, and all of the money transaction processes happen for you.</p>\n<p>Essentially, this is how MetaMask functions in the cryptocurrency world, as well.</p>\n<p>In this section, we’re going to check out what is MetaMask. We’ll also answer questions such as “<strong>is MetaMask safe?</strong>”, and how you can use this crypto software platform in your daily life.</p>\n<p>Let’s get right to it, shall we?</p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"What is a MetaMask Wallet? (And How to Use it - Animated)\"\n title=\"What is a MetaMask Wallet? (And How to Use it - Animated)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Metamask: The Leading Non-Custodial Wallet</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"Metamask: The Leading Non-Custodial Wallet\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"6vGE446Fjvg\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">What is a MetaMask Wallet? (And How to Use it - Animated)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/6vGE446Fjvg/hq720.jpg/"/n alt=\"What is a MetaMask Wallet? (And How to Use it - Animated)\"\n title=\"What is a MetaMask Wallet? (And How to Use it - Animated)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"What is a MetaMask Wallet? (And How to Use it - Animated)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"6vGE446Fjvg\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>What is MetaMask?</h2>\n<p>First things first - what is MetaMask?</p>\n<p>Well, MetaMask is an internet app that serves a few different purposes. The primary (and most well-known) purpose is <strong>cryptocurrency storage</strong> - in other words, MetaMask is a “<a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/best-cryptocurrency-wallet/">crypto wallet</strong></a>”, or actually a <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-hot-wallet/">HOT crypto wallet</strong></a>!</p>\n<p>Why “hot”, though?</p>\n<p>Simply, in crypto, all <strong>software-based wallets </strong>are called “hot wallets”, and as an opposite, all electronic hardware-based wallets are called “<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-cold-wallet/">cold wallets</strong></a>”.</p>\n<p>So, first and foremost, the MetaMask app is a software wallet!</p>\n<p><img title=\"What is MetaMask: Cold and Hot crypto wallets.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-1.o.jpg/" alt=\"What is MetaMask: Cold and Hot crypto wallets.\" width=\"800\" height=\"532\" /></p>\n<p>Let’s break the concept of a crypto wallet down.</p>\n<p>A cryptocurrency wallet is a digital equivalent of your physical wallet. Just as you hold your real money in your physical wallet, cryptocurrency wallets hold your digital coins - cryptocurrencies such as <a href=https://www.bitdegree.org/"/crypto/buy-bitcoin-btc/">Bitcoin, <a href=https://www.bitdegree.org/"/crypto/buy-ethereum-eth/">Ethereum, and many more.</p>\n<p>Some wallets can only hold one coin, and are thus “dedicated”. For example, a Bitcoin-dedicated wallet would only be able to hold BTC coins. <strong>Others have the ability to hold multiple crypto coins - it depends!</strong></p>\n<p>MetaMask, however, is <strong>a dedicated wallet</strong> - it only allows you to hold everything that is related to the Ethereum blockchain: <strong>Ethereum coins, and any other ETH-based tokens</strong>. Check out the section called \"<a href=https://www.bitdegree.org/"/crypto/learn/coin-vs-token/">Coins VS Tokens</strong></a>\" to understand the differences and how they are related.</p>\n<p>But shortly, cryptocurrency tokens are projects built on the blockchain of a specific coin - in this case, Ethereum. It’s a bit more complex and technical than that, but that's the premise. But what you should clearly understand is that you can’t store your Bitcoins on Metamask, but <strong>you can store any token that is built on the Ethereum blockchain</strong>, for example, <strong>Tether, Shiba Inu, Axie Infinity, and similar</strong>.</p>\n<p style=\"text-align: center;\"><img title=\"What is MetaMask: What is MetaMask?\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-2.o.jpg/" alt=\"What is MetaMask: What is MetaMask?\" width=\"801\" height=\"606\" /></p>\n<p>Here is an example: imagine that you’ve decided to go and wash your car. You approach a car washing station and have to insert coins in order for the machines to start working. However, the car wash only accepts US dollar coins, and any other foreign currencies, like Euros or Pounds Sterling get rejected!</p>\n<p>The same logic applies to MetaMask - it only accepts Ethereum, and tokens that are built on the Ethereum blockchain.</p>\n<p>What about the “hot” wallet part, though - how is it HOT, in the first place?</p>\n<p>In the cryptocurrency world, “hot” wallets are those that <strong>maintain a constant connection to the internet</strong>. This means that, in order to use MetaMask, you will need to always be connected to the internet, and have access to the browser (or device) that the wallet is installed on. Yes, <strong>MetaMask acts both as a browser extension, and a mobile app.</strong></p>\n<p>Specifically, in the same manner, as how you would add apps such as Grammarly or adBlock to your browser, as a web extension, MetaMask will need to be added, as well. Or it can be downloaded from either the Android or the iOS stores.</p>\n<p>So - it’s clear that MetaMask is primarily used as an Ethereum wallet. However, as you might have heard, it’s actually considered to be the most popular ETH wallet out there, in general! MetaMask has managed to achieve this by offering its users ease of use.</p>\n<p style=\"text-align: center;\"><img title=\"What is MetaMask: What is a \" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-3.o.jpg/" alt=\"What is MetaMask: What is a \" width=\"1031\" height=\"773\" /></p>\n<p>To be more specific, MetaMask allows you to perform cryptocurrency transactions (Ethereum payments or transfers) in a super-simple manner.<strong> You can even buy crypto tokens from an integrated third party, without leaving your MetaMask wallet, with the company taking a small cut as a transaction fee </strong>(this is how MetaMask makes money, too)!</p>\n<p>Think of the earlier-discussed PayPal example - now, imagine PayPal integrated into your browser!</p>\n<p>No matter where you go online, if you’d like to purchase something, all that you’d need to do is enter your password, and that’s it - you'll be able to pay for your order in a matter of seconds! MetaMask works in a similar manner - integrated into your browser, it allows you <strong>to access your Ethereum or ETH tokens in just a few clicks</strong>. You can also pay, send, or exchange ETH with anyone you’d like.</p>\n<h2>Is MetaMask Safe?</h2>\n<p>So - MetaMask is very convenient to use, as a cryptocurrency wallet. We’ve established that much already! However, naturally, you might question - <strong>is it reliable and safe to use, in the first place?</strong></p>\n<p>The short answer is <strong>YES,</strong> it is. Let’s expand on it, though, shall we?</p>\n<p>MetaMask provides <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-encryption/">encryption and security technology and <strong>acts as the middleman between the user, and the service that they are accessing</strong>. In other words, MetaMask can be seen as the bridge between two parties - a bridge that’s full of security patrols, cameras, and guard posts.</p>\n<p>Before we continue, I urge you to, once again, think about the <strong>PayPal</strong> example we’ve used a couple of times in this section already. PayPal encrypts your data, and protects all of your financial information - <strong>your money is only sent to those shops and service providers that you approve, manually</strong>.</p>\n<p>In essence, MetaMask is the same. As a wallet, it protects your funds but still allows you to access them in a quick and effortless manner, when you need to.</p>\n<p>All of that being said, I do have to point out that, all things considered, it IS a hot wallet - one that maintains a constant connection to the internet. <strong>In turn, this does open up doors for vulnerabilities.</strong></p>\n<p>Being connected to the web all the time, hot wallets are more prone to break-ins and hacking attempts, as opposed to cold wallets, or <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-hardware-wallet/">hardware devices. These are special devices that usually look like a USB drive, but are designated for storing and keeping your cryptocurrencies safe, offline.</p>\n<p>Hot wallets, in general, aren’t the safest choice, when it comes to storing cryptocurrencies. However, they are very convenient, and<strong> require less time and effort to use, when compared to hardware devices</strong>!</p>\n<p style=\"text-align: center;\"><img title=\"What is MetaMask: types of wallets.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-5.o.jpg/" alt=\"What is MetaMask: types of wallets.\" width=\"800\" height=\"401\" /></p>\n<p>An example that you can imagine is that of a car. Cars can be dangerous - something can go wrong with the engine, or you might get a flat tire mid-journey, and swirl into a ditch. On top of that, you always need to keep an eye on other drivers on the road, lest they would decide to drive into you.</p>\n<p>That said, many people choose to drive cars, nonetheless. This is because the risk level is rather mediocre, especially if you take all of the active precautions beforehand - don’t go over the speed limit, wear your seatbelt, and so on.</p>\n<p>The same can be said about hot wallets such as MetaMask, too. <strong>If you don’t visit shady websites or press suspicious links, and avoid any potential scams or strange individuals offering to double your crypto if you send it to them, you will minimize the risks, too!</strong></p>\n<h2>How to Use MetaMask?</h2>\n<p>Up to this point, we’ve covered what is MetaMask, and the question of whether or not it’s safe to use. Now, let’s take a look at how you can actually start using the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/tutorials/cryptocurrency-wallet/">cryptocurrency wallet</strong></a> in question!</p>\n<p>Since simplicity is key with MetaMask, installing the wallet isn’t a difficult process, either. Just <strong>3 steps</strong> and you’re done!</p>\n<p>All that you need to do is go to <strong>MetaMask.io</strong>, the official website. By the way, don’t fall for other scammy websites impersonating the real MetaMask wallet, and always check the URL in your browser for any possible spelling errors while visiting their website! It is kind of a usual fraudster’s practice, to fake an official domain, so be aware!</p>\n<p>So next, depending on the device that you might be using, you will be able to download the official Metamask wallet <strong>as a browser extension</strong>, or as an app for Android or iOS mobile devices.</p>\n<p style=\"text-align: center;\"><img title=\"What is MetaMask: How to use MetaMask?\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-6.o.jpg/" alt=\"What is MetaMask: How to use MetaMask?\" width=\"800\" height=\"650\" /></p>\n<p>Once it’s installed, you’ll need to set up the wallet itself. While setting up, the most important part is <strong>the recovery phrase</strong>! Save it securely when prompted. I just want to emphasize here that the recovery phrase is the only tool that you’ll have in order to get your crypto funds back if you lose access to your wallet (for example, your computer gets damaged, or you lose your phone). Never ever share it with anybody for any reason!</p>\n<p><strong>Once all of that is done, that’s it - you can start sending and receiving Ethereum and its tokens from and to your MetaMask account!</strong></p>\n<p>One handy feature is that MetaMask also allows you to create multiple wallet accounts within the same app, if you so wish to, and even connect your hardware wallet to one of those accounts, for extra added security. This is like taking a safe full of money, and concreting it underground - <strong>it will increase the safety and security of your assets exponentially!</strong></p>\n<p style=\"text-align: center;\"><strong><img title=\"What is MetaMask: Recap.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-metamask-7.o.jpg/" alt=\"What is MetaMask: Recap.\" width=\"800\" height=\"458\" /></strong></p>\n<p>So, in this section, we’ve covered what MetaMask is, whether or not it’s a safe wallet to use, and how you can start using it, yourself. Being one of the most popular Ethereum wallets out there, it’s definitely worth learning about the platform, even if you don’t plan on using it, personally. And finally, I really encourage you <strong>just to go and try it yourself</strong>, it costs nothing and will take you a minute. But overall you’ll learn through experiencing it yourself!</p>\n<p>That being said, I hope this section was helpful to you and you can also check out another topic such as \"<a href=https://www.bitdegree.org/"/crypto/learn/what-are-smart-contracts/">What are Smart Contracts</strong></a>?\".</p>","preview_url":"https://www.bitdegree.org/crypto/learn/what-is-metamask","youtube_video":{"id":4,"channel_id":1,"sort":54,"video_title":"What is a MetaMask Wallet? (And How to Use it - Animated)","description":"What is MetaMask?\n\nMetaMask is best-known for being a hot cryptocurrency wallet - a digital place to store your crypto assets. It’s one of the most popular Ethereum wallets (it supports Ethereum and ERC tokens), and can be used as either a browser extension, or a mobile app.\n\nThat being said, MetaMask is actually much more than simply a cryptocurrency wallet. The piece of crypto software acts as a bridge between the user, and the service that they might be interacting with. This is exactly what I cover in this video, on top of questions such as what MetaMask is, and how you can use it, on a daily basis.\n\nHave you ever used MetaMask? Share your experiences in the comments below!\n\nVideo Time Table:\n\n0:00 Introduction to What is MetaMask\n0:51 What is MetaMask?\n2:53 What is a Hot Wallet?\n4:33 Is MetaMask Safe?\n6:59 How to Use MetaMask?\n8:27 Wrap-up of What is MetaMask\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps://twitter.com/crypto_xplained\n\n#Metamask #WhatisMetaMask #WhatisMetaMaskWallet #HowToUseMetaMask #CryptoWallet #Cryptocurrencies #Crypto #Tokens","video_id":"6vGE446Fjvg","duration":543,"view_count":509,"thumbnail_url":"https://i.ytimg.com/vi/6vGE446Fjvg/hq720.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-02-08 14:48:28","created_at":"2022-02-21T13:20:28.000000Z","updated_at":"2023-05-21T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}},"chapterTitle":"Crypto Wallets","cryptoBookSection":{"id":424,"featured_image_id":9338,"original_id":null,"youtube_video_id":136,"author_id":42,"translator_id":null,"chapter_id":4,"title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","slug":"how-safe-is-cryptocurrency","definition":"Did you know that being more attentive and cautious is one of the main ways to boost your safety in the crypto world?","status":"published","content":"<p>In this section, we’re going to talk about <strong>how safe is cryptocurrency</strong>, as well as some of the best crypto wallet safety practices that everyone should be following!</p>\n<p>Imagine that you’ve bought the safest wallet on the planet. It has multiple locks attached to it, and even a digital display requiring your fingerprint in order for it to open. You store all of your money within the wallet, and walk around feeling very safe about your cash.</p>\n<p>However, one day, while you weren’t looking, someone grabs your wallet from the table where you left it on. Even though it might have been the safest wallet in the world, it still got stolen - in order to avoid something like this happening in the real world, to your crypto assets, you need to be aware of some of <strong>the best crypto wallet safety practices</strong>!</p>\n<p>In this section, we’re going to look at how safe is cryptocurrency, as well as some of the most important crypto wallet safety and security practices that you should be aware of, when you’re just starting out with crypto. I’ll reveal the top tips for keeping your crypto safe, and then elaborate on how you can use them yourself, no matter what type of wallet you might have.</p>\n<p><em>So, let’s get to it!</em></p>\n<h2>Don’t Tell Anyone About Your Crypto</h2>\n<p>Now, keep in mind that a lot of the best <strong>crypto wallet safety practices covered in this section are going to be applicable to both hot wallets, as well as cold storage devices.</strong></p>\n<p>If you have no idea what are hot or cold crypto wallets, please make sure to read the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/hot-wallet-vs-cold-wallet/">section dedicated to this topic</strong></a>. It’ll help you get a much better understanding of how to keep your wallets safe!</p>\n<p>So, now - is it safe to invest in cryptocurrency, and just how safe are cryptocurrencies, in general? Well, the answer really depends on whether or not you follow all of the “best safety practices”!</p>\n<p>The first safety practice is rather simple - <strong>you should never tell anyone about owning crypto, or about the wallets that you use</strong>.</p>\n<p>Why is that the case? Let's expand on the earlier example.</p>\n<p>Imagine that, with your super-secret wallet in hand, you went to a coffee shop to meet a friend, and ordered a cup of coffee. Excited about your new wallet, you start telling your friend all about how secure it is, and how you now keep all of your money inside of it. A stranger sitting nearby overhears your conversation, and takes an interest in what you’re saying.</p>\n<p>The first opportunity they get, when you’re not looking, they grab your wallet, and run off with it. Perhaps if you wouldn’t have boasted about that item, it would still be in your possession, and you wouldn’t need to ask yourself - is crypto safe?</p>\n<p>Cryptocurrency wallets work the exact same way, really. With <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-hardware-wallet/">hardware wallets</strong></a>, this is self-explanatory - they are actual physical items that can be stolen. The same, though, is true with <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-hot-wallet/">hot wallets</strong></a>, as well.</p>\n<p>If you go around boasting about your crypto portfolio, telling everyone where you keep all of your assets, you risk becoming a target to some less-than-honorable individuals. The saying <em>“money loves silence”</em> is very accurate, in this regard - you can probably see why that’s the case, as well!</p>\n<h2>Store Your Recovery Phrase Somewhere Safe</h2>\n<p>Moving on, note that there’s actually something even more important than your crypto wallet, cryptocurrency storage-wise. Something that is essential to know about, when you’re wondering “how safe is cryptocurrency?”. That would be the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-recovery-seed/">wallet recovery phrase</strong></a>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Recovery phrase.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_01.jpg/" alt=\"How safe is cryptocurrency: Recovery phrase.\" width=\"1000\" height=\"384\" /></p>\n<p>Whenever you set up a crypto wallet for the first time, you are given a string of randomly generated words – usually 12 or 24. <strong>These words, in that exact order, are your wallet recovery phrase</strong>. If your wallet got lost, stolen, or if you forgot your password, you would use this phrase to recover your funds to a new wallet.</p>\n<p>Now, as you can probably guess, this works the other way around, too. So, if someone were to steal your wallet recovery phrase, they would essentially be able to <em>“recover”</em> (i.e., steal) all of your wallet’s contents. Needless to say, that’s a really scary scenario!</p>\n<p>This is why it’s absolutely crucial that you keep your wallet recovery phrase in the safest possible place you can think of. Since it’s something that you’d only need to use in an emergency, you can store it somewhere remote, like a safe. On top of that, <strong>NEVER tell anyone where it is</strong> - that’s very important!</p>\n<h2>Avoid Clicking Weird Links on the Internet</h2>\n<p>The next “best crypto wallet safety practice” is mainly applicable to hot wallet owners. It has to do with <strong>all of those weird links that you see in your email, on various websites, or in your chat box</strong>. This includes a message that you’ve received from a friend, telling you to <em>\"check out</em> <em>this awesome photo on this definitely-not-suspicious website”.</em></p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Weird links.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_02.jpg/" alt=\"How safe is cryptocurrency: Weird links.\" width=\"1000\" height=\"309\" /></em></p>\n<p>You know the drill by now - links with viruses and keyloggers are something that we’ve all encountered, at least once in our lives. Some of them are very obvious, but others can be super-malicious, as well as difficult to spot.</p>\n<p>Well, if you’re not careful, and accidentally download a virus by clicking on one of such links, you might set in motion a sequence of events that’ll lead to your wallet being emptied. It doesn’t necessarily have to be related to questions such as is staking crypto safe, or is accessing a specific dApp secure - these hacks can happen in crypto-unrelated ways, as well!</p>\n<p><strong>The best-case scenario is to have a separate device</strong>, altogether. You would only use this device to log into your crypto exchange account, trade, and use your wallet to perform transactions - that’s it. Assuming that the device is brand new, and hasn’t been compromised before, this would lower the chance of you catching a virus significantly.</p>\n<p>Naturally, not that many people are going to take this route. Instead, if you use but a single device for all of your internet browsing and crypto trading wants and needs, do put in the conscious effort to <strong>avoid any suspicious websites and more-than-shady links</strong>.</p>\n<h2>Don’t Carry Your Wallet Around With You</h2>\n<p>As opposed to all of that, let’s now take a look at a safety practice that’s mostly relevant to cold, or hardware wallet owners - <strong>never carry your wallet around with you, if you won’t need it</strong>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Cold wallet.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_03.jpg/" alt=\"How safe is cryptocurrency: Cold wallet.\" width=\"1000\" height=\"760\" /></p>\n<p>Though this is something that you’ve probably figured out already - thieves and malicious individuals are always looking for people who are not careful with their belongings. Cryptocurrency wallet devices are definitely not an exception. Instead, quite the opposite is true, really - they attract attention, due to the fact that they look interesting and futuristic. Even wallets that are designed to look like everyday items are still somewhat unusual - that’s both a good thing, and a bad thing, really!</p>\n<p>In other words, <strong>your hardware wallet should remain in a safe and secure place, at all times</strong>. Usually, there’s absolutely no need to bring it with you to a date, a meetup with friends, or to the local grocery store. Everyone learning about how safe is cryptocurrency should know this very well!</p>\n<p>If you do accidentally take your wallet with you and notice only after you leave the house - keep it in your pocket, and don’t tell anyone! Otherwise, you might end up being the main character of the situation I described at the beginning of this section!</p>\n<h2>Be Careful With Your Transactions</h2>\n<p>Up to this point, we’ve mostly talked about <em>“external”</em> factors - thieves stealing your wallet, keyloggers & viruses, and so on. However, learning is cryptocurrency safe, you’ll find out that wallet safety practices are applicable to the other side of the deal, as well.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Transactions.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_04.jpg/" alt=\"How safe is cryptocurrency: Transactions.\" width=\"1000\" height=\"755\" /></p>\n<p>To be a bit more specific, <strong>you should always check the transactions that you’re participating in</strong>, too. Never interact with strange applications that ask you for your wallet address, and never send your crypto to some shady third parties. With the crypto market evolving so fast, scams evolve, as well, and become more and more intricate and clever. The best way to avoid them is to remove yourself from a fishy situation, altogether.</p>\n<p>On the flip side, avoiding these types of situations can sometimes be tricky, I admit. This is where the second part of this crypto wallet safety practice comes in - <strong>diversifying your crypto storage options</strong>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Crypto storage.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_05.jpg/" alt=\"How safe is cryptocurrency: Crypto storage.\" width=\"1000\" height=\"529\" /></p>\n<p>Is it safe to buy crypto on <strong><a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/robinhood-crypto/" target=\"_blank\" rel=\"nofollow noindex noopener\">Robinhood</a></strong>? Probably, but only if you use an external wallet. Is Gemini crypto safe? Perhaps, but far less safe if you keep your tokens on the exchange! Can I keep crypto on <strong><a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/binance/" target=\"_blank\" rel=\"nofollow noindex noopener\">Binance</a></strong>, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/kraken/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Kraken</strong></a>, or any other exchange? Well…</p>\n<p>If you want to feel a bit more at ease about your portfolio, you should <strong>always have multiple wallets at your disposal</strong>, with at least one of them being a hardware device (due to their high-end security). This way, even if something were to go wrong, and one of your wallets got compromised, you wouldn’t risk losing ALL of your assets.</p>\n<p>Of course, managing multiple wallets can be a daunting task. Nonetheless, it’s certainly a practice that can save your crypto, especially if you have a large portfolio of different coins and tokens!</p>\n<h2>Wrapping Things Up</h2>\n<p>Those were some of the best crypto wallet safety practices that every beginner crypto enthusiast should be aware of, and utilize. Of course, there are many more different safety measures that you could take, in order to ensure the security of your crypto. However, if you employ the practices that were discussed in this section, you’ll already be ahead of the curve, by a significant margin!</p>\n<p>So, how safe is cryptocurrency, and is it safe to invest in crypto, in the first place? It’s clear that, if you follow all of the proper precautions, <strong>crypto can be relatively safe</strong>. Though it’s important to always stay up-to-date and aware of what’s happening in the industry!</p>","meta_title":"Is Cryptocurrency Safe? Effective Wallet Safety Practices","meta_description":"Do you want to invest in crypto but keep wondering how safe is cryptocurrency? Find everything about crypto wallet safety practices here!","meta_keywords":"how safe is cryptocurrency, is it safe to invest in cryptocurrency, is cryptocurrency safe, is crypto safe, crypto security, is staking crypto safe, is it safe to buy crypto on robinhood, is gemini crypto safe, keep crypto on coinbase","order":37,"language":"en","created_at":"2023-01-17T12:04:08.000000Z","updated_at":"2023-02-02T06:47:43.000000Z","modified_content":"<p>In this section, we’re going to talk about <strong>how safe is cryptocurrency</strong>, as well as some of the best crypto wallet safety practices that everyone should be following!</p>\n<p>Imagine that you’ve bought the safest wallet on the planet. It has multiple locks attached to it, and even a digital display requiring your fingerprint in order for it to open. You store all of your money within the wallet, and walk around feeling very safe about your cash.</p>\n<p>However, one day, while you weren’t looking, someone grabs your wallet from the table where you left it on. Even though it might have been the safest wallet in the world, it still got stolen - in order to avoid something like this happening in the real world, to your crypto assets, you need to be aware of some of <strong>the best crypto wallet safety practices</strong>!</p>\n<p>In this section, we’re going to look at how safe is cryptocurrency, as well as some of the most important crypto wallet safety and security practices that you should be aware of, when you’re just starting out with crypto. I’ll reveal the top tips for keeping your crypto safe, and then elaborate on how you can use them yourself, no matter what type of wallet you might have.</p>\n<p><em>So, let’s get to it!</em></p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"Is Your Crypto Safe? (5 Best Crypto Security Practices Explained)\"\n title=\"Is Your Crypto Safe? (5 Best Crypto Security Practices Explained)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"bN5XetWivGA\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">Is Your Crypto Safe? (5 Best Crypto Security Practices Explained)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/bN5XetWivGA/hq720.jpg/"/n alt=\"Is Your Crypto Safe? (5 Best Crypto Security Practices Explained)\"\n title=\"Is Your Crypto Safe? (5 Best Crypto Security Practices Explained)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"Is Your Crypto Safe? (5 Best Crypto Security Practices Explained)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"bN5XetWivGA\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>Don’t Tell Anyone About Your Crypto</h2>\n<p>Now, keep in mind that a lot of the best <strong>crypto wallet safety practices covered in this section are going to be applicable to both hot wallets, as well as cold storage devices.</strong></p>\n<p>If you have no idea what are hot or cold crypto wallets, please make sure to read the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/hot-wallet-vs-cold-wallet/">section dedicated to this topic</strong></a>. It’ll help you get a much better understanding of how to keep your wallets safe!</p>\n<p>So, now - is it safe to invest in cryptocurrency, and just how safe are cryptocurrencies, in general? Well, the answer really depends on whether or not you follow all of the “best safety practices”!</p>\n<p>The first safety practice is rather simple - <strong>you should never tell anyone about owning crypto, or about the wallets that you use</strong>.</p>\n<p>Why is that the case? Let's expand on the earlier example.</p>\n<p>Imagine that, with your super-secret wallet in hand, you went to a coffee shop to meet a friend, and ordered a cup of coffee. Excited about your new wallet, you start telling your friend all about how secure it is, and how you now keep all of your money inside of it. A stranger sitting nearby overhears your conversation, and takes an interest in what you’re saying.</p>\n<p>The first opportunity they get, when you’re not looking, they grab your wallet, and run off with it. Perhaps if you wouldn’t have boasted about that item, it would still be in your possession, and you wouldn’t need to ask yourself - is crypto safe?</p>\n<p>Cryptocurrency wallets work the exact same way, really. With <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-hardware-wallet/">hardware wallets</strong></a>, this is self-explanatory - they are actual physical items that can be stolen. The same, though, is true with <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-hot-wallet/">hot wallets</strong></a>, as well.</p>\n<p>If you go around boasting about your crypto portfolio, telling everyone where you keep all of your assets, you risk becoming a target to some less-than-honorable individuals. The saying <em>“money loves silence”</em> is very accurate, in this regard - you can probably see why that’s the case, as well!</p>\n<h2>Store Your Recovery Phrase Somewhere Safe</h2>\n<p>Moving on, note that there’s actually something even more important than your crypto wallet, cryptocurrency storage-wise. Something that is essential to know about, when you’re wondering “how safe is cryptocurrency?”. That would be the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-recovery-seed/">wallet recovery phrase</strong></a>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Recovery phrase.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_01.jpg/" alt=\"How safe is cryptocurrency: Recovery phrase.\" width=\"1000\" height=\"384\" /></p>\n<p>Whenever you set up a crypto wallet for the first time, you are given a string of randomly generated words – usually 12 or 24. <strong>These words, in that exact order, are your wallet recovery phrase</strong>. If your wallet got lost, stolen, or if you forgot your password, you would use this phrase to recover your funds to a new wallet.</p>\n<p>Now, as you can probably guess, this works the other way around, too. So, if someone were to steal your wallet recovery phrase, they would essentially be able to <em>“recover”</em> (i.e., steal) all of your wallet’s contents. Needless to say, that’s a really scary scenario!</p>\n<p>This is why it’s absolutely crucial that you keep your wallet recovery phrase in the safest possible place you can think of. Since it’s something that you’d only need to use in an emergency, you can store it somewhere remote, like a safe. On top of that, <strong>NEVER tell anyone where it is</strong> - that’s very important!</p>\n<h2>Avoid Clicking Weird Links on the Internet</h2>\n<p>The next “best crypto wallet safety practice” is mainly applicable to hot wallet owners. It has to do with <strong>all of those weird links that you see in your email, on various websites, or in your chat box</strong>. This includes a message that you’ve received from a friend, telling you to <em>\"check out</em> <em>this awesome photo on this definitely-not-suspicious website”.</em></p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Weird links.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_02.jpg/" alt=\"How safe is cryptocurrency: Weird links.\" width=\"1000\" height=\"309\" /></em></p>\n<p>You know the drill by now - links with viruses and keyloggers are something that we’ve all encountered, at least once in our lives. Some of them are very obvious, but others can be super-malicious, as well as difficult to spot.</p>\n<p>Well, if you’re not careful, and accidentally download a virus by clicking on one of such links, you might set in motion a sequence of events that’ll lead to your wallet being emptied. It doesn’t necessarily have to be related to questions such as is staking crypto safe, or is accessing a specific dApp secure - these hacks can happen in crypto-unrelated ways, as well!</p>\n<p><strong>The best-case scenario is to have a separate device</strong>, altogether. You would only use this device to log into your crypto exchange account, trade, and use your wallet to perform transactions - that’s it. Assuming that the device is brand new, and hasn’t been compromised before, this would lower the chance of you catching a virus significantly.</p>\n<p>Naturally, not that many people are going to take this route. Instead, if you use but a single device for all of your internet browsing and crypto trading wants and needs, do put in the conscious effort to <strong>avoid any suspicious websites and more-than-shady links</strong>.</p>\n<h2>Don’t Carry Your Wallet Around With You</h2>\n<p>As opposed to all of that, let’s now take a look at a safety practice that’s mostly relevant to cold, or hardware wallet owners - <strong>never carry your wallet around with you, if you won’t need it</strong>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Cold wallet.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_03.jpg/" alt=\"How safe is cryptocurrency: Cold wallet.\" width=\"1000\" height=\"760\" /></p>\n<p>Though this is something that you’ve probably figured out already - thieves and malicious individuals are always looking for people who are not careful with their belongings. Cryptocurrency wallet devices are definitely not an exception. Instead, quite the opposite is true, really - they attract attention, due to the fact that they look interesting and futuristic. Even wallets that are designed to look like everyday items are still somewhat unusual - that’s both a good thing, and a bad thing, really!</p>\n<p>In other words, <strong>your hardware wallet should remain in a safe and secure place, at all times</strong>. Usually, there’s absolutely no need to bring it with you to a date, a meetup with friends, or to the local grocery store. Everyone learning about how safe is cryptocurrency should know this very well!</p>\n<p>If you do accidentally take your wallet with you and notice only after you leave the house - keep it in your pocket, and don’t tell anyone! Otherwise, you might end up being the main character of the situation I described at the beginning of this section!</p>\n<h2>Be Careful With Your Transactions</h2>\n<p>Up to this point, we’ve mostly talked about <em>“external”</em> factors - thieves stealing your wallet, keyloggers & viruses, and so on. However, learning is cryptocurrency safe, you’ll find out that wallet safety practices are applicable to the other side of the deal, as well.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Transactions.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_04.jpg/" alt=\"How safe is cryptocurrency: Transactions.\" width=\"1000\" height=\"755\" /></p>\n<p>To be a bit more specific, <strong>you should always check the transactions that you’re participating in</strong>, too. Never interact with strange applications that ask you for your wallet address, and never send your crypto to some shady third parties. With the crypto market evolving so fast, scams evolve, as well, and become more and more intricate and clever. The best way to avoid them is to remove yourself from a fishy situation, altogether.</p>\n<p>On the flip side, avoiding these types of situations can sometimes be tricky, I admit. This is where the second part of this crypto wallet safety practice comes in - <strong>diversifying your crypto storage options</strong>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How safe is cryptocurrency: Crypto storage.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/crypto_wallet_safety_practices_05.jpg/" alt=\"How safe is cryptocurrency: Crypto storage.\" width=\"1000\" height=\"529\" /></p>\n<p>Is it safe to buy crypto on <strong><a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/robinhood-crypto/" target=\"_blank\" rel=\"nofollow noindex noopener\">Robinhood</a></strong>? Probably, but only if you use an external wallet. Is Gemini crypto safe? Perhaps, but far less safe if you keep your tokens on the exchange! Can I keep crypto on <strong><a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/binance/" target=\"_blank\" rel=\"nofollow noindex noopener\">Binance</a></strong>, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/kraken/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Kraken</strong></a>, or any other exchange? Well…</p>\n<p>If you want to feel a bit more at ease about your portfolio, you should <strong>always have multiple wallets at your disposal</strong>, with at least one of them being a hardware device (due to their high-end security). This way, even if something were to go wrong, and one of your wallets got compromised, you wouldn’t risk losing ALL of your assets.</p>\n<p>Of course, managing multiple wallets can be a daunting task. Nonetheless, it’s certainly a practice that can save your crypto, especially if you have a large portfolio of different coins and tokens!</p>\n<h2>Wrapping Things Up</h2>\n<p>Those were some of the best crypto wallet safety practices that every beginner crypto enthusiast should be aware of, and utilize. Of course, there are many more different safety measures that you could take, in order to ensure the security of your crypto. However, if you employ the practices that were discussed in this section, you’ll already be ahead of the curve, by a significant margin!</p>\n<p>So, how safe is cryptocurrency, and is it safe to invest in crypto, in the first place? It’s clear that, if you follow all of the proper precautions, <strong>crypto can be relatively safe</strong>. Though it’s important to always stay up-to-date and aware of what’s happening in the industry!</p>","preview_url":"https://www.bitdegree.org/crypto/learn/how-safe-is-cryptocurrency","youtube_video":{"id":136,"channel_id":1,"sort":14,"video_title":"Is Your Crypto Safe? (5 Best Crypto Security Practices Explained)","description":"How safe is cryptocurrency, and what are some of the best crypto wallet safety practices?\n\nCryptocurrency wallets are designed with security in mind - that’s obvious. However, even the most secure wallet in the world can fail, if the owner doesn’t understand the basic principles of wallet safety!\n\nIn this video, I will tell you about how safe is cryptocurrency, as well as the best crypto wallet safety practices that any and all wallet owners need to employ. We’ll look into both hardware and software wallets, talk about is crypto safe, in general, and discuss tips that will suit both of these types of crypto storage.\n\nDo you have any additional tips for keeping your crypto wallet safe? Share them in the comments below!\n\nVideo Time Table:\n\n0:00 Introduction to Best Crypto Security Practices\n1:08 Don't Tell Anyone About Your Crypto\n3:10 Store Your Recovery Phrase Somewhere Safe\n4:15 Avoid Clicking Weird Links on the Internet\n5:35 Don't Carry Your Wallet Around With You\n6:50 Be Careful With Your Transactions\n8:26 Wrap-up: Best Crypto Security Practices\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps://twitter.com/crypto_xplained\n\n#HowSafeIsCryptocurrency #CryptoSecurity #IsCryptocurrencySafe","video_id":"bN5XetWivGA","duration":549,"view_count":221,"thumbnail_url":"https://i.ytimg.com/vi/bN5XetWivGA/hq720.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-02-01 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Terms","updated":false,"chapter":"https://assets.bitdegree.org/crypto/assets/crypto-book/chapters/crypto-101-glossary.jpg","chapter_simple":"https://assets.bitdegree.org/crypto/assets/crypto-book/chapters-simple/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}],"currentChapter":"crypto-wallets","currentSection":"how-safe-is-cryptocurrency","readingTime":8,"readingLevel":"easy"},"url":"/crypto/learn/how-safe-is-cryptocurrency","version":"cdd198d50cbe5c9c21c9329d7c096ffc"}" class="container-fluid d-flex crypto-book p-0">
All Crypto From

Scratch!

Crypto 101 Handbook

Chapter 1: Blockchain

1.1

What is the Blockchain?
1.2

Anonymous & Decentralized Blockchains: The Cornerstone of Crypto
1.3

What is a Blockchain Transaction in Crypto?
1.4

The Different Types of Crypto Fees Explained
1.5

The Key Notion Behind the Concept of Bridging in Crypto
1.6

Different Types of Blockchains: What to Look Out For?
Chapter 2: Cryptocurrencies

2.1

What is a Cryptocurrency?
2.2

How Does Cryptocurrency Work?
2.3

Is Cryptocurrency a Good Investment? The Pros & Cons
2.4

Coin VS Token: How Do They Differ?
2.5

What are Stablecoins, Altcoins & Wrapped Coins?
2.6

Bitcoin: the Pioneer of the Crypto World
2.7

The Ultimate Blockchain for dApp Creation: Ethereum
2.8

What is Cardano and What is It Used For?
2.9

Shiba Inu: the Dogecoin Killer
2.10

Is Solana an Improved Version of Ethereum?
2.11

The Bridge Between Blockchains: Polkadot
2.12

Polygon: the Essential Scaling Solution for Ethereum
2.13

The Practical Use of Crypto
Chapter 3: Crypto Exchanges

3.1

How do Cryptocurrency Exchanges Work?
3.2

DEX VS CEX: Two Sides of the Crypto Exchange Industry
3.3

Crypto Day Trading: The Difference Between Buying, Trading, and Swapping
3.4

KYC & AML: The Key to Complying With Legal Industry Standards
3.5

From Fiat to Crypto: How to Buy Crypto for the First Time
3.6

Taking Profits: Turning Crypto Into Fiat
3.7

You’ve Got Crypto: What Can You Do With It?
Chapter 4: Crypto Wallets

4.1

What is a Crypto Wallet?
4.2

Hot Wallet VS Cold Wallet: Which One to Pick?
4.3

What are Non-Custodial Crypto Wallets?
4.4

Metamask: The Leading Non-Custodial Wallet
4.5

The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?
Chapter 5: NFTs

5.1

What are Non-Fungible Tokens (NFTs)?
5.2

NFT Trading: The Ins and Outs
5.3

Tips and Tricks of Choosing the Right NFTs
5.4

How to Store NFTs: Best Practices
5.5

How to Create Your Own NFTs?
5.6

Making Passive Money with NFTs
Chapter 6: dApps & Defi

6.1

What is Decentralized Finance (DeFi)?
6.2

DeFi 2.0: The New Version of Decentralized Finance
6.3

What Are dApps and How Do They Work?
6.4

Picking the Right dApps: Dos and Don'ts
6.5

Web 3.0: The Future of the Internet
6.6

What is the Core Purpose of Smart Contracts?
6.7

The Notion of a Decentralized Autonomous Ogranization (DAO)
6.8

What is the Goal of Staking Crypto Assets?
6.9

What is a Liquidity Pool and How Does It Work?
6.10

Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry
6.11

The Main Yield Farming Techniques
6.12

Crypto Oracles: The Link Between Blockchain and Outside World Data
6.13

The Peculiarities of Decentralized Crypto Gambling
6.14

Metaverse: A New Perception of Reality
Chapter 7: Trading & Investing

7.1

Where Can You Trade Cryptocurrencies?
7.2

Investing in Crypto: What Investing Options Do You Have?
7.3

ICO vs IDO vs IEO: Which One is the One?
7.4

What are Crypto Airdrops and How to Get Them?
7.5

How to Get Free Crypto Assets?
7.6

What is Crypto Arbitrage: The Main Principles
7.7

What is FUD: How to Use It to Your Advantage While Investing in Crypto?
7.8

Investing in Cryptocurrency: How to Manage Your Risks?
7.9

What is a Rug Pull in Crypto?
7.10

How to Spot and Avoid Rug Pulls?
7.11

The Key Legal Techniques of Avoiding Crypto Taxes
Chapter 8: Crypto Analysis

8.1

Bearish and Bullish Markets: Do They Matter?
8.2

5 Best Crypto Technical Analysis Indicators You Must Know About
8.3

Technical Analysis: What are Candlesticks, Trendlines, and Patterns?
8.4

Crypto Tracking: How to Track Your Favorite Coins & Tokens?
8.5

Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy
Chapter 9: Mining

coming soon

Chapter 10: Crypto Terms

10.1

All Crypto Terms

Handbook Cover Page

Chapter 4: Crypto Wallets

The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?

Did you know that being more attentive and cautious is one of the main ways to boost your safety in the crypto world?

Easy

8 minutes

Watch Video

In this section, we’re going to talk about how safe is cryptocurrency, as well as some of the best crypto wallet safety practices that everyone should be following!

Imagine that you’ve bought the safest wallet on the planet. It has multiple locks attached to it, and even a digital display requiring your fingerprint in order for it to open. You store all of your money within the wallet, and walk around feeling very safe about your cash.

However, one day, while you weren’t looking, someone grabs your wallet from the table where you left it on. Even though it might have been the safest wallet in the world, it still got stolen - in order to avoid something like this happening in the real world, to your crypto assets, you need to be aware of some of the best crypto wallet safety practices!

In this section, we’re going to look at how safe is cryptocurrency, as well as some of the most important crypto wallet safety and security practices that you should be aware of, when you’re just starting out with crypto. I’ll reveal the top tips for keeping your crypto safe, and then elaborate on how you can use them yourself, no matter what type of wallet you might have.

So, let’s get to it!

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Video Explainer: The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?

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Is Your Crypto Safe? (5 Best Crypto Security Practices Explained)

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Don’t Tell Anyone About Your Crypto

Now, keep in mind that a lot of the best crypto wallet safety practices covered in this section are going to be applicable to both hot wallets, as well as cold storage devices.

If you have no idea what are hot or cold crypto wallets, please make sure to read the section dedicated to this topic. It’ll help you get a much better understanding of how to keep your wallets safe!

So, now - is it safe to invest in cryptocurrency, and just how safe are cryptocurrencies, in general? Well, the answer really depends on whether or not you follow all of the “best safety practices”!

The first safety practice is rather simple - you should never tell anyone about owning crypto, or about the wallets that you use.

Why is that the case? Let's expand on the earlier example.

Imagine that, with your super-secret wallet in hand, you went to a coffee shop to meet a friend, and ordered a cup of coffee. Excited about your new wallet, you start telling your friend all about how secure it is, and how you now keep all of your money inside of it. A stranger sitting nearby overhears your conversation, and takes an interest in what you’re saying.

The first opportunity they get, when you’re not looking, they grab your wallet, and run off with it. Perhaps if you wouldn’t have boasted about that item, it would still be in your possession, and you wouldn’t need to ask yourself - is crypto safe?

Cryptocurrency wallets work the exact same way, really. With hardware wallets, this is self-explanatory - they are actual physical items that can be stolen. The same, though, is true with hot wallets, as well.

If you go around boasting about your crypto portfolio, telling everyone where you keep all of your assets, you risk becoming a target to some less-than-honorable individuals. The saying “money loves silence” is very accurate, in this regard - you can probably see why that’s the case, as well!

Store Your Recovery Phrase Somewhere Safe

Moving on, note that there’s actually something even more important than your crypto wallet, cryptocurrency storage-wise. Something that is essential to know about, when you’re wondering “how safe is cryptocurrency?”. That would be the wallet recovery phrase.

Whenever you set up a crypto wallet for the first time, you are given a string of randomly generated words – usually 12 or 24. These words, in that exact order, are your wallet recovery phrase. If your wallet got lost, stolen, or if you forgot your password, you would use this phrase to recover your funds to a new wallet.

Now, as you can probably guess, this works the other way around, too. So, if someone were to steal your wallet recovery phrase, they would essentially be able to “recover” (i.e., steal) all of your wallet’s contents. Needless to say, that’s a really scary scenario!

This is why it’s absolutely crucial that you keep your wallet recovery phrase in the safest possible place you can think of. Since it’s something that you’d only need to use in an emergency, you can store it somewhere remote, like a safe. On top of that, NEVER tell anyone where it is - that’s very important!

Avoid Clicking Weird Links on the Internet

The next “best crypto wallet safety practice” is mainly applicable to hot wallet owners. It has to do with all of those weird links that you see in your email, on various websites, or in your chat box. This includes a message that you’ve received from a friend, telling you to "check out this awesome photo on this definitely-not-suspicious website”.

You know the drill by now - links with viruses and keyloggers are something that we’ve all encountered, at least once in our lives. Some of them are very obvious, but others can be super-malicious, as well as difficult to spot.

Well, if you’re not careful, and accidentally download a virus by clicking on one of such links, you might set in motion a sequence of events that’ll lead to your wallet being emptied. It doesn’t necessarily have to be related to questions such as is staking crypto safe, or is accessing a specific dApp secure - these hacks can happen in crypto-unrelated ways, as well!

The best-case scenario is to have a separate device, altogether. You would only use this device to log into your crypto exchange account, trade, and use your wallet to perform transactions - that’s it. Assuming that the device is brand new, and hasn’t been compromised before, this would lower the chance of you catching a virus significantly.

Naturally, not that many people are going to take this route. Instead, if you use but a single device for all of your internet browsing and crypto trading wants and needs, do put in the conscious effort to avoid any suspicious websites and more-than-shady links.

Don’t Carry Your Wallet Around With You

As opposed to all of that, let’s now take a look at a safety practice that’s mostly relevant to cold, or hardware wallet owners - never carry your wallet around with you, if you won’t need it.

Though this is something that you’ve probably figured out already - thieves and malicious individuals are always looking for people who are not careful with their belongings. Cryptocurrency wallet devices are definitely not an exception. Instead, quite the opposite is true, really - they attract attention, due to the fact that they look interesting and futuristic. Even wallets that are designed to look like everyday items are still somewhat unusual - that’s both a good thing, and a bad thing, really!

In other words, your hardware wallet should remain in a safe and secure place, at all times. Usually, there’s absolutely no need to bring it with you to a date, a meetup with friends, or to the local grocery store. Everyone learning about how safe is cryptocurrency should know this very well!

If you do accidentally take your wallet with you and notice only after you leave the house - keep it in your pocket, and don’t tell anyone! Otherwise, you might end up being the main character of the situation I described at the beginning of this section!

Be Careful With Your Transactions

Up to this point, we’ve mostly talked about “external” factors - thieves stealing your wallet, keyloggers & viruses, and so on. However, learning is cryptocurrency safe, you’ll find out that wallet safety practices are applicable to the other side of the deal, as well.

To be a bit more specific, you should always check the transactions that you’re participating in, too. Never interact with strange applications that ask you for your wallet address, and never send your crypto to some shady third parties. With the crypto market evolving so fast, scams evolve, as well, and become more and more intricate and clever. The best way to avoid them is to remove yourself from a fishy situation, altogether.

On the flip side, avoiding these types of situations can sometimes be tricky, I admit. This is where the second part of this crypto wallet safety practice comes in - diversifying your crypto storage options.

Is it safe to buy crypto on Robinhood? Probably, but only if you use an external wallet. Is Gemini crypto safe? Perhaps, but far less safe if you keep your tokens on the exchange! Can I keep crypto on Binance, Kraken, or any other exchange? Well…

If you want to feel a bit more at ease about your portfolio, you should always have multiple wallets at your disposal, with at least one of them being a hardware device (due to their high-end security). This way, even if something were to go wrong, and one of your wallets got compromised, you wouldn’t risk losing ALL of your assets.

Of course, managing multiple wallets can be a daunting task. Nonetheless, it’s certainly a practice that can save your crypto, especially if you have a large portfolio of different coins and tokens!

Wrapping Things Up

Those were some of the best crypto wallet safety practices that every beginner crypto enthusiast should be aware of, and utilize. Of course, there are many more different safety measures that you could take, in order to ensure the security of your crypto. However, if you employ the practices that were discussed in this section, you’ll already be ahead of the curve, by a significant margin!

So, how safe is cryptocurrency, and is it safe to invest in crypto, in the first place? It’s clear that, if you follow all of the proper precautions, crypto can be relatively safe. Though it’s important to always stay up-to-date and aware of what’s happening in the industry!

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Crypto 101 Handbook

The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?

Video Explainer: The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?

Don’t Tell Anyone About Your Crypto

Store Your Recovery Phrase Somewhere Safe

Avoid Clicking Weird Links on the Internet

Don’t Carry Your Wallet Around With You

Be Careful With Your Transactions

Wrapping Things Up

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